THAI BEVERAGE has decided to concentrate its energy on expanding its alcohol and non-alcohol as well as logistics businesses closer to home as part of its 2020 vision to become a stable and sustainable Asean leader.
“We want to build a strong footprint of our beverage business in continental Asean as our priority,” Thapana Sirivadhanabhakdi, president and chief executive of ThaiBev, said yesterday.
The group will explore business opportunities through organic expansion as well as mergers and acquisitions especially in the CLMV (Cambodia, Laos, Myanmar and Vietnam) and Malaysia and Singapore markets, which will be handled by its Singapore-based subsidiary Fraser and Neave (F&N).
However, he said it would study other high-population markets such as the Philippines and Indonesia, although they pose challenges for market penetration and logistics management because of their archipelagic geography.
Vietnam, Myanmar and Cambodia have been recognised by ThaiBev as important markets for its Asean game plan.
“The total population of CLMV and Thailand is as high as 250 million. It is half of Asean’s population,” Thapana said.
ThaiBev’s core beverage products, both alcohol and non-alcohol, will go into Vietnam, while the logistics and beverage businesses will enter Myanmar, he said.
It is also looking at Cambodia for its beverage products and the Philippines and Indonesia for its non-alcohol products.
“Non-alcoholic beverages contribute about 40 per cent of ThaiBev’s revenue. We want the contribution from non-alcohol beverages to reach 50 per cent of our annual revenue by 2020,” he said.
The company’s non-alcohol beverage business is now in investment mode, he said.
The company’s Asean sales reached Bt60 billion last year, of which Bt30 billion was from Thailand.
“Under our 2020 vision, the overseas contribution is to exceed 50 per cent of our total revenue,” Thapana said.
The vision would benefit the company’s growth potential, which is not just limited to Asean.
There are also the regional trade agreements with other markets, such as Asean Plus 3, Asean Plus 6 and Asean Plus 9.
ThaiBev will allocate Bt9 billion for capital expenditures in the fiscal year ending September 2017, mainly on the improvement of the working system and production machinery, Thapana said.
ThaiBev’s board of directors recently approved a new organisational structure, to go into effect on October 1, to materialise the 2020 vision.
“The new management line-up will support the continuous growth of our business and will lay a strong foundation for the future and also provide growth to all ThaiBev’s employees.
“The new structure will help transform ThaiBev into a truly sustainable organisation,” he said.
Three senior executives – Ueychai Tantha-Obhas, Sithichai Chaikriangkrai, and Pisanu Vichiensanth – will be promoted to directors and senior executive vice presidents in charge of lifting the group’s operating efficiency, reducing costs and building the bottom line.
Ueychai, who laid a strong foundation in Thailand’s spirits industry and has been the country’s prominent leader in the commercial spirits markets over the past three decades, will oversee Thailand’s distribution channels as route-to-market chief.
Sithichai, who has been voted Thailand’s best chief financial officer for three years from 2014-16 and Southeast Asia’s best CFO last year, will continue to oversee ThaiBev’s finances and support the group’s growth as CFO.
Pisanu Vichiensanth, who pioneered ThaiBev’s beer business, will continue to look over the group’s technology and engineering functions as chief technology and engineering officer.
The board also approved the promotion of two executives to spearhead the growth of the spirits and beer groups.
Prapakon Thongtheppairot, who championed Chang beer’s re-launch in 2015, will be promoted to executive vice president (EVP) and spirits product group CEO, succeeding Ueychai.
Edmond Neo Kim Soon, who was also instrumental in Chang beer’s re-launch, will rise to EVP and beer product group CEO.
Prapakon said that after the re-launch in August last year, Chang beer now controlled about 40 per cent of the 2-billion-litre domestic beer market, up from about 30 per cent last year before the re-launch.
The company’s aim is to increase the local market share of Chang beer to 45 per cent by 2020.
“Besides Thailand, we are expanding Chang beer into Singapore via F&N.
“We will distribute our beer product into Vietnam via Metro cash-and-carry stores and Berli Jucker’s logistics network in the country.
“The company last year also appointed a local distributor in Cambodia. Named Attwood, the company had distributed Heineken beer in that country for 20 years,” he said.
For the spirits business, the company wants to strengthen its leadership in the Thai market as well as be a local pioneer in exploring Asean opportunities with the Philippines, Vietnam and Myanmar. They are considered high-potential markets for the company’s spirits business.
“We want to create our own readiness and capability for borderless trade and expansion,” Prapakon said.